The Prime Minister faced her first set of parliamentary questions in 2018 at PMQs today.
Question no 1 was on leasehold
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I, too, wish members of staff a happy new year.
At least 1.4 million households across the UK have been victims of unfair practices in the leasehold market, including my constituent Emily Martin. In advance of any intended legislation, what commitment will the Prime Minister make to ensure that Emily and thousands of people tied into this PPI-like scandal are compensated by developers now?
We are concerned when we hear of unfair practices taking place. I am sure that the Housing Minister will be happy to hear of this particular case as an example. We are looking to see what action the Government can take to ensure that people are secure in their homes and are not subject to practices that they should not be subject to.
Question no 11 was also on leasehold
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Q11. Telford is a rapidly growing new town where thousands of new houses are built every year. People come to Telford to buy their home on a new-build estate and live their dream, but for far too many the reality is unfinished communal areas, unadopted roads, non-compliance with section 106, developers failing to take responsibility and the local council passing the buck. Colleagues on both sides of the House see similar problems in their constituencies. Will the Prime Minister agree to strengthen the rights of home owners on new-build estates so that people can come to Telford, or to any other new-build area, and buy a new-build home confident that they can live their dream? [903181]
I am happy to say to my hon. Friend that of course we recognise the concern she has raised; this is a similar issue to the one raised by the hon. Member for Weaver Vale (Mike Amesbury). I understand that it is Telford’s 50th anniversary, so I congratulate it on that. We are committed to legislating in relation to the unfair practice my hon. Friend has identified, because it is only fair that freeholders should have the same rights as leaseholders to challenge the reasonableness of the service charges they are being submitted to.
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Good to see the high profile being given to the leasehold scandal by politicians. Loads of firm nodding behind the questioners.
The first question seemed to me to assume its precise aim was clear (was it just about new houses being sold leasehold given the number quoted and the reference to PPI and developers, or did it also or alternatively mean to reference doubling ground rent?
It clearly needed the PM to seek advice before answering. Not surprising (I’d hope) given the government has admitted between 4 – 6 million leaseholders all suffer under serious ‘feudal’ practices.
The 1.4 million might have been the cause for her confusion?
Either that or she has rather a short memory what with her office having tweeted to the #LEASEHOLDSCANDAL
The campaign is far from over.
The campaign is far from over. Regrettably, so true Paddy.
In fact, I do not believe it is anywhere near as further forward to what many think/thought it was.
The PM needs advisors who actually know what they are talking about before she speaks in the house and public.
Have you really got the transcript correct in your article LKP?
PM says – ….. “it is only fair that freeholders should have the same rights as leaseholders to challenge the reasonableness of the service charges they are being submitted to”.
Freeholders have same rights as leaseholders – what does that drivel mean
they are changing the legislation so that freeholders can challenge the reasonableness of service charges. That was somehow a big part of the consultation, that this ‘injustice’ against freeholders is rectified.
Presumably thats for cases where freeholders do not control the managing agent because there is an RTM?
Ok fleecehold, I can see where it is is coming from now.
However, I don’t know any freeholders who are interested in S Charges, They don’t pay them anyway.
So almost zilch was refereed to in PMs Q Time about actual leaseholders, onerous leases, crazy ground rents etc etc etc.
Whilst I am having a rant can anybody point me in the right direction as to who attended, and what happened, at that meeting MPs etc were having just before they broke for christmas break.
Can MP’s challenge the cost of repairs to the Houses of Parliament?
PM says – ….. “it is only fair that freeholders should have the same rights as leaseholders to challenge the reasonableness of the service charges they are being submitted to”.
Freeholders have same rights as leaseholders – what does that drivel mean
PM speech writers have got it wrong way round. Freeholders don’t pay service charges ???
It is only fair that Leaseholders should have the right to challenge the reasonableness of the service charges they are being submitted to .
There are cases when the freeholder has to pay a share of the service charges. It depends on the lease. In our case, the freeholder controlled two units with sitting tenants and had to pay 10% of service charges. This clause caused no end of problems and accounting gymnastics – particularly tricky with major works. It could be solved very simply with an open accounting system, but I don’t see the PM enforcing that.
Just as with the whole ‘plastics ban’ was really about encouraging people to recycle and think before buying plastic, i.e. The people who already care will step up and those who don’t give a rats ass will carry on as normal. Same with leasehold – leaseholders need teeth to enforce their rights, audit accounts, appoint managing agents etc. Instead the governments is focusing on freeholders getting more rights.
I think the Service Charges the PM was referring to must be those that Freeholders pay when certain areas are not adopted by local councils.
It is the modern trend to get planning permission easier.
The Council gets all the extra Council Tax without having to maintain the open spaces and sometimes the roads.
It is one of the Fleecehold conditions many are complaining about.
Michael Hollands, And of course it means that unadopted roads can be built to a much lower standard at far less cost to the developer.. that because of this they will require more maintenance is of no consequence to the developers as they know it will be the homeowners that will be paying for this.
Whilst many now know of the scandal of developers selling off the freeholds of peoples homes from under their feet to offshore companies, it should be remembered that the developers are also selling off the freeholds to the surrounding land as well. These common areas are often granted a lease to the “appointed” managing agent.
I am a long leaseholder ina private residential block. We have 6 floors. Basement to 2nd floor is commercial and floors 3 to 6 have 21 residential apartments.
I had101 years on the lease with an increasing ground rent of £300 per year. I decided to take the statutory route to have a 90 year lease extension for. The process took 2.5 years and cost £10,250. I now have a peppercorn rent.
My neighbours, independently, tried the same tact but the Freehold Owner manged to persuade them to take an informally approach resulting in them paying a small ground rent, the same costs and a compromise stating they would no longer attempt within their ownership of the lease to extend it by statutory means.
So I have a ground rent of £0. Can I increase the lease again by another 90 years? And the existing ground rent is a peppercorn rent for 189 years. Is there any compensation due to the Freehold Ownwer. The Leasehold Advisory Service states you can extend the lease as many times as you wish.
Secondly, we have no control over the running of the building. The Freeholder gets lease rent from small businesses on the basemen to 2nd floor. We have a reception desk and cleaning regime which supports on the whole the commercial leases but we all pay for the services in the service charge.
Thirdly, residential leaseholders can’t buy their share of the freehold because it’s a 50/50 residential and commercial split. Which means we are permanently locked out of controlling and maintaining the building.
I can’t see why England has not replicated the Scottish system which abolished residential leasehold in the 1950s around the time of the slum clearings.
Any thoughts would be welcome.